{
  "title": "How Strong Infrastructure Governance Can End Waste in Public Investment",
  "publication": "IMF Blog, September 3, 2020",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2020/09/03/blog090320-how-strong-infrastructure-governance-can-end-waste-in-public-investment",
  "canonical": "https://www.imf.org/en/blogs/articles/2020/09/03/blog090320-how-strong-infrastructure-governance-can-end-waste-in-public-investment",
  "overlayPath": "/en/blogs/articles/2020/09/03/blog090320-how-strong-infrastructure-governance-can-end-waste-in-public-investment/index.md",
  "summary": "Authors: Gerd Schwartz, Manal Fouad, Torben Hansen, Geneviève Verdier",
  "sections": [
    {
      "heading": "Overview and context",
      "content": "- Authors: Gerd Schwartz, Manal Fouad, Torben Hansen, Geneviève Verdier\n- Date: September 3, 2020\n- Context: COVID-19 has had a profound impact on people, firms, and economies worldwide; public infrastructure investment will play a key role in recovery but resources are tight and must be spent wisely through good infrastructure governance."
    },
    {
      "heading": "Key findings and statistics",
      "content": "- Countries waste on average about 1/3 of their infrastructure spending due to inefficiencies.\n- The loss can surpass a staggering 50 percent in low-income countries.\n- Estimates show that over half of these losses could be made up through better infrastructure governance.\n- The IMF’s Public Investment Management Assessments have been carried out in more than 60 countries."
    },
    {
      "heading": "Why strong infrastructure governance matters",
      "content": "- Public investment projects tend to be large, long-term, and complex—creating fertile ground for corruption, delays, and cost overruns when governance is weak.\n- Well-designed and well-implemented public infrastructure can:\n  - Stimulate weak aggregate demand.\n  - Help boost more inclusive growth.\n  - Reduce inequalities.\n  - Create economic opportunities.\n  - Improve resilience to climate change and future pandemics.\n- Investment priorities highlighted: health systems, digital infrastructure, environmentally-conscious infrastructure, and maintenance of aging infrastructure in advanced economies (roads, bridges, healthcare systems)."
    },
    {
      "heading": "Practical areas for reform and policy actions",
      "content": "- Strengthen institutions and frameworks to plan, allocate, and implement quality public infrastructure.\n- Control corruption in infrastructure projects.\n- Mitigate and manage fiscal risks associated with public investment.\n- Integrate planning and budgeting across the public investment cycle.\n- Adopt sound practices early in the public investment cycle, particularly during project appraisal and selection.\n- Maintain and manage public infrastructure assets to avoid deterioration in public asset value.\n- Build resilience against climate change in infrastructure planning and asset management.\n- Focus not only on having well-designed frameworks but also on ensuring they function effectively in practice."
    },
    {
      "heading": "Illustrative country practices",
      "content": "- Chile: developed a comprehensive infrastructure governance system that has generated cost-savings.\n- Korea: a national one-stop shop for public procurement has improved transparency and integrity in public procurement.\n- South Africa: established guidelines and standards for the maintenance of public infrastructure to avoid deterioration of assets like roads and bridges."
    },
    {
      "heading": "Vision for recovery",
      "content": "- The economic recovery from COVID-19 presents an opportunity to “build a bridge to the future” through quality public infrastructure that yields economic and social dividends.\n- Emphasis: when spending more on infrastructure, countries need to “spend better and smarter” so every dollar counts."
    },
    {
      "heading": "Forward-looking note",
      "content": "- The October 2020 Fiscal Monitor will include more of the IMF’s analysis and policy advice on how countries can best invest in infrastructure to build a sustainable economy and recovery.\n\nHow Strong Infrastructure Governance Can End Waste in Public Investment — Gerd Schwartz, Manal Fouad, Torben Hansen, Geneviève Verdier, September 3, 2020\n\n---\n\n\n References\n\n- عربي\n- ,\n- 日本語\n- public lifelines\n- recovery\n- new book\n- climate change\n- Public Investment Management Assessments\n\nSource: https://www.imf.org/en/blogs/articles/2020/09/03/blog090320-how-strong-infrastructure-governance-can-end-waste-in-public-investment"
    }
  ],
  "bullets": [
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    "[Structured JSON version](/en/blogs/articles/2020/09/03/blog090320-how-strong-infrastructure-governance-can-end-waste-in-public-investment/index.json)",
    "[Bundle manifest](/en/blogs/articles/2020/09/03/blog090320-how-strong-infrastructure-governance-can-end-waste-in-public-investment/bundle-manifest.json)",
    "Authors: Gerd Schwartz, Manal Fouad, Torben Hansen, Genevive Verdier",
    "Published: September 3, 2020",
    "Authors: Gerd Schwartz, Manal Fouad, Torben Hansen, Geneviève Verdier",
    "Date: September 3, 2020",
    "Context: COVID-19 has had a profound impact on people, firms, and economies worldwide; public infrastructure investment will play a key role in recovery but resources are tight and must be spent wisely through good infrastructure governance.",
    "Countries waste on average about 1/3 of their infrastructure spending due to inefficiencies.",
    "The loss can surpass a staggering 50 percent in low-income countries.",
    "Estimates show that over half of these losses could be made up through better infrastructure governance.",
    "The IMF’s Public Investment Management Assessments have been carried out in more than 60 countries.",
    "Public investment projects tend to be large, long-term, and complex—creating fertile ground for corruption, delays, and cost overruns when governance is weak.",
    "Well-designed and well-implemented public infrastructure can:",
    "Investment priorities highlighted: health systems, digital infrastructure, environmentally-conscious infrastructure, and maintenance of aging infrastructure in advanced economies (roads, bridges, healthcare systems).",
    "Strengthen institutions and frameworks to plan, allocate, and implement quality public infrastructure.",
    "Control corruption in infrastructure projects.",
    "Mitigate and manage fiscal risks associated with public investment.",
    "Integrate planning and budgeting across the public investment cycle.",
    "Adopt sound practices early in the public investment cycle, particularly during project appraisal and selection.",
    "Maintain and manage public infrastructure assets to avoid deterioration in public asset value.",
    "Build resilience against climate change in infrastructure planning and asset management.",
    "Focus not only on having well-designed frameworks but also on ensuring they function effectively in practice.",
    "Chile: developed a comprehensive infrastructure governance system that has generated cost-savings.",
    "Korea: a national one-stop shop for public procurement has improved transparency and integrity in public procurement.",
    "South Africa: established guidelines and standards for the maintenance of public infrastructure to avoid deterioration of assets like roads and bridges.",
    "The economic recovery from COVID-19 presents an opportunity to “build a bridge to the future” through quality public infrastructure that yields economic and social dividends.",
    "Emphasis: when spending more on infrastructure, countries need to “spend better and smarter” so every dollar counts.",
    "The October 2020 Fiscal Monitor will include more of the IMF’s analysis and policy advice on how countries can best invest in infrastructure to build a sustainable economy and recovery.",
    "[عربي](https://www.imf.org/ar/News/Articles/2020/09/03/blog090320-how-strong-infrastructure-governance-can-end-waste-in-public-investment)",
    "[,](https://blog-dialogoafondo.imf.org/?p=13908)",
    "[日本語](https://www.imf.org/ja/News/Articles/2020/09/03/blog090320-how-strong-infrastructure-governance-can-end-waste-in-public-investment)",
    "[public lifelines](https://blogs.imf.org/2020/04/15/fiscal-policies-to-contain-the-damage-from-covid-19/)",
    "[recovery](https://blogs.imf.org/2020/05/06/fiscal-policies-for-the-recovery-from-covid-19/)",
    "[new book](https://elibrary.imf.org/view/IMF071/28328-9781513511818/28328-9781513511818/28328-9781513511818.xml)",
    "[climate change](https://www.imf.org/en/Topics/climate-change)",
    "[Public Investment Management Assessments](https://www.imf.org/external/np/fad/publicinvestment/)"
  ],
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